Financial Highlights

Once again, year 2007 represented another historical landmark for the Group with its steel business achieving its highest turnover of RM548 million since its inception in 1971.

The strong performance was complimented by the Group achieving its highest profit before tax of RM46 million surpassing all previous PBT records.

This strong performance for year 2007 was primarily attributed to the raise of domestic and global demand for steel coupled together with the successful implementation of various technologies by the Management to improve plant efficiency.

BUSINESS OUTLOOK

Looking forward to 2008, we expect to benefit from the beginning of the ‘Super Cycle’ for steel products worldwide.

This ‘Super Cycle’ is underscored by the surge of demand primarily from China, India, Middle East and Russia. As the economics of these regions begin to decouple from the US economy, the impact of a possible onset of a U.S. recession is expected to be well cushioned.

With the potential merger of two of the three major iron ore producers in the world that contribute up to 80% of the international supply of this basic feedstock and the scaling of historical records of crude oil prices, steel prices are expected to continue to climb in the foreseeable future. And domestically, the pace for the implementation of the RM220 billion, 9th Malaysia Plan (2006-2010) is expected to be quicken in year 2008 as the bulk of projects earmarked is expected to be constructed within the next 3 years.

The Group is confident that it is well poise to fully capitalize on these favorable business environment. Operationally, the Management of the Group is continuing its relentless efforts to ‘Cost Down’ its production costs to counter the effects of rising consumables and raw materials prices.

CORPORATE DEVELOPMENT

The company had successfully placed out to institutional investors through the issuance of 13,000,000 new share capital or 10% of paid up share capital during the financial year and the exercise was completed in January 2007. The total issued share capital is 146 million ordinary shares.

CORPORATE SOCIAL RESPONSIBILITY

Under the Corporate Social Responsibility (CSR) initiatives, the Group has set its sights to make the reduction of Green House gases from the environment as its main CSR agenda. The creation of 2 acres ‘Green Lung’ has been initiated with the planting of suitable flora species. It is the objective of the Group to increase the acreage of the ‘Green Lung’ within its 40 acres industrial complex to eventually cover 15% of its real estate within the next 3 years. In order not to deplete the valuable water resources needed to maintain these ‘Green Lung’, appropriate rain ‘Catchment Devices’ is being install to minimize the used of Jabatan Bekalan Air (JBA) water supply.

The Group’s aspiration to venture into the high growth and high margin Bio Technology section has became a reality in 2007, with the conferment by Malaysian Biotechnology Corporation Sdn Bhd to Bio Molecular Industries Sdn Bhd, a wholly owned subsidiary of Masteel, the very stringent and prestigious Bio Nexus status certification in July 2007. The construction of its RM40 million facility in Sepang has also commenced in late 2007 and market is expected to receive its first batch of high grade radiopharmaceuticals product by year 2009.

APPRECIATION

On behalf of the Board, I would like to take this opportunity to thank our invaluable shareholders, customers, bankers, suppliers and government authorities and without doubt, our achievements will not has been made possible without the driving force of our prudent management team and dedicated employees, whom have dedicated their unwavering commitments, time and energy to ensure the success of our businesses. I gratefully salute all of you!